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Old 03-16-2017, 05:11 PM   #1421
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Nobody is losing money in this thread. It is just not as interesting or entertaining to watch people just make gobs of money.

I couldn't stand having money in my account, so I bought some shares of VTI and VCSH when they dropped lower today. I intend to sell some VFIAX tomorrow to make up for this indiscretion.
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Old 03-25-2017, 03:33 PM   #1422
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Just curious, and maybe this has been answered before but this thread is awfully long...

If you had just put 100% of your money into an equity index fund, and never touched it from the day you began this thread until now, how would it compare to your actual returns?
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Old 03-25-2017, 03:52 PM   #1423
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It is hard to say because my portfolio is not 100% equities … I simply cannot accept that risk. My portfolio is about 60% equities, so I benchmark against 60/40 funds as described earlier in the thread. I consistently beat my benchmarks.

So far YTD, the portfolio is ahead of Vanguard Wellington by about 0.75% and Vanguard Balanced Index by 0.65% and a DFA 60/40 fund by about 0.6% which is about what it is supposed to do.

The advice in this thread is not supposed to be "hit it out of the park" advice, but I think it provides actionable advice in near real-time. I also discuss things that don't work out, too.
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Old 03-25-2017, 04:51 PM   #1424
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Fair enough...and not a bad return at all.

The only problem is that if you charged the typical fee that an active fund manager or financial advisor wanted to charge for your expertise, you'd be underperforming the market. But since your knowledge and expertise comes without a cost to you, I'd say you've done quite well!
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Old 03-25-2017, 06:22 PM   #1425
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Actually, I may not have done quite well. Here are the performances of three 60/40 funds from Morningstar.com:



VSMGX is Vg LifeStrategy Moderate Growth. It has US and foreign stocks and bonds.

VBIAX is Vg Balance Index. It has only US stocks and US bonds, so no foreign holdings.

DGSIX is a DFA Global 60/40 fund. It is a small-cap and value tilted fund with a significant chunk of foreign holdings.

So the spread of performances at over 1% difference average annual return is rather high for a set of passively-managed funds all with a 60/40 asset allocation. If a fund owned foreign equities during a time of poor foreign stock performance, then it didn't do as well as an all-US fund. If a fund owned lots of small-caps and/or value funds when large caps and growth asset classes were doing better, then it didn't perform as well either.

There is really no way to predict which asset classes are going to end up best for the year … and they change from year-to-year. So if one jumps into VBIAX today, maybe it becomes the loser over the next few years. Or if one sticks to small-cap and value-tilted which did quite well in the past, maybe it is the worst going forward. You just cannot know. Nor can you switch your choices at will because of the tax consequences from selling assets held in a taxable account.

And yes, the typical fee of an advisor and any taxes will make returns worse. That is, I don't think there is any way someone with an advisor can outperform a reasonable set of index funds or ALL of the 3 benchmark funds I named in this post over time.

Plus just about anytime you touch your portfolio you detract from its return.
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Old 03-30-2017, 08:45 AM   #1426
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A slew of quarterly dividends posted to my accounts this morning, so I have some cash to invest. The problem is that I like to buy things that have dropped somewhat and everything I have bought recently and/or own has gone up modestly in the past few weeks.

I have to decide if I hate holding cash more than I hate buying something on the uptick.
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Old 03-30-2017, 11:31 AM   #1427
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A slew of quarterly dividends posted to my accounts this morning, so I have some cash to invest. The problem is that I like to buy things that have dropped somewhat and everything I have bought recently and/or own has gone up modestly in the past few weeks.

I have to decide if I hate holding cash more than I hate buying something on the uptick.
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I was once told it's better to buy equities on the way up rather than on the way down. As a general rule. it seems hard to practice that.
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Old 03-30-2017, 01:30 PM   #1428
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Even when stocks are rising, they can rise more if the economy is improving. The problem is when P/E is so high, stocks are priced for perfection and hell will be paid if there is any earning disappointment.

I try to find lesser known stocks with lower P/E than the S&P, but with the same or better earning improvement prospects. It is not all risk-free, because smaller stocks do not have the momentum of larger caps, and if the economy stumbles and the big guys catch a sneeze, these little guys get a 105F fever.
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Old 03-30-2017, 02:18 PM   #1429
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I was once told it's better to buy equities on the way up rather than on the way down. As a general rule. it seems hard to practice that.
There is that whole "momentum" thing that is proven, but there is also that whole "value" thing which is supposed to have low correlation to momentum. And momentum works both ways ... things going down tend to keep going down until there is capitulation. I seem to have a decent track record for detecting capitulation when it happens.

I am slightly overweighted in equities and don't need to buy more of them unless they are guaranteed to go up quickly in the short term.
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Old 04-05-2017, 01:24 PM   #1430
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In 2016, last year, my total return was 8.9%, out of which 1% was from the premium of covered calls. I was able to choose strike prices high enough that most of the calls expired worthless, and saved me the trouble of buying back the stocks, as I did not want my cash AA to go even higher.

This year, I already got more than 5% return YTD, but have collected only 0.2% in covered call premiums. The market shows sign of topping out, I guess. The buyers do not pay that much for call premium, unless I pick strike prices low enough that the chance of losing the stocks is high. And so, I have not been able to make as many trades.

Perhaps I should go for lower strike prices, and if the calls get exercised, let the stocks go and raise my cash level. Then, I will be able to pat myself on the back for having more cash when the market tumbles.
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Old 04-05-2017, 02:07 PM   #1431
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I made some trades today, but I'm not feeling good about them:

1. Sold AGG (total bond index) to raise cash, but it was trading at the high it reached back in February if the two monthly dividends are taken into account, then ...

2. Bought IJS (small-cap value) here at the end of the day. IJS was trading about 2+% higher earlier this morning on payroll news, but really flagged at the end of the day to close about 1% down. This might be the lowest close of 2017.
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If IJS goes up by at least 2% later this week (jobs report?), then I will sell it.

From a Yahoo news report:
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The Dow posted its largest intra-day downside reversal in 14 months in Wednesday's session after shedding a gain of more than 198 points to end near the session low, which was a drop of nearly 50 points.
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Old 04-06-2017, 07:40 PM   #1432
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And things were looking good at the market close, but then the $#it hit the fan.
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Old 04-06-2017, 07:42 PM   #1433
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And things were looking good at the market close, but then the $#it hit the fan.
Buy when the cannons are booming.
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Old 04-06-2017, 07:59 PM   #1434
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^But of course! It is helpful that some dividends show up overnight, too.
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Old 04-07-2017, 10:21 AM   #1435
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I expected better jobs numbers and no cruise missiles today. So instead of nice pop, we get a subdued, yet still positive, market. It seems everything is up a tiny bit, except for IJS. But there are few hours to go, so anything can still happen.

I have received some dividends today and want to put them to work. They are not large enough to even mention the single-digit share trades. Otherwise, I'm just carrying on.
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Old 04-10-2017, 09:03 AM   #1436
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If IJS goes up by at least 2% later this week (jobs report?), then I will sell it.
IJS hit the gain-of-2% trigger point this morning while I was out for a walk and dropped back down. I will be paying more attention the rest of today to see what happens with an eye to still selling if IJS goes back up.
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Old 04-11-2017, 08:29 AM   #1437
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So I come back from a walk and see that IJS is slightly up while the similar VBR is slightly down while total US market is down about 0.5%, so I immediately sell the IJS bought last week for a gain of about 1.7%. And IJS drops immediately thereafter to get in line with other US stock ETFs.

It is not valid, but since the money to buy IJS came from a bond fund and will go back to a bond fund, I treat this as making 1.7% on bond fund money in a week.
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But, I had to pay a short-term trading fee for this sale. While it's the first commission I've paid since I can remember, I don't regret it.
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Old 04-11-2017, 10:17 AM   #1438
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And for the record, IJS is now higher than when I sold it earlier today. It dipped more than 0.5% since I sold and completely recovered and then some. And IJS hit my 2% trigger too late a moment ago.

OTOH, large cap US is still down, but recovering, so I used the proceeds from selling IJS to buy VTI (total US stock market). If VTI is up more later today, then I intend to sell some VFIAX (large cap US) to restore my asset allocation.
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Old 04-11-2017, 02:17 PM   #1439
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I didn't play today as well as I could have, but I didn't hurt myself too badly either.

The best play after selling IJS would have been to buy it back within 30 minutes at the low of the day. I could've done that in another account by selling some AGG and buying IJS. I would've had no commissions on either of those trades. IJS closed up about 1.2% from that point.

OK, I didn't do the best play. Instead I bought VTI which gained about 0.3% from when I bought it and sold VFIAX at the end of the day to keep my asset allocation of US large caps where I want it to be. The selling of IJS gets my asset allocation to US small-caps back to where I want it to be.

Since the purchase of IJS last week though, I did better than if I had done nothing last week and my portfolio asset allocation is back to where it was before that purchase.
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Thanks for following along. Didn't anybody else do any "day trading" today?
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Old 04-11-2017, 04:28 PM   #1440
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In 2016, last year, my total return was 8.9%, out of which 1% was from the premium of covered calls. I was able to choose strike prices high enough that most of the calls expired worthless, and saved me the trouble of buying back the stocks, as I did not want my cash AA to go even higher.

This year, I already got more than 5% return YTD, but have collected only 0.2% in covered call premiums. The market shows sign of topping out, I guess. The buyers do not pay that much for call premium, unless I pick strike prices low enough that the chance of losing the stocks is high. And so, I have not been able to make as many trades...
I have not written any more covered calls, but the ones expiring in April look like they will drop out-of-the-money, and get me another 0.1% portfolio gain. It's not a lot of money, but when you live on 3 to 4% of portfolio, every bit helps.

My bet on the S&P dropping, made back in early March, looks like it will make me a tiny bit of money, which is not enough to get me a fancy steakhouse dinner for two with drinks. It does not conclude until the option contract expires April 21st, but it looks like the gain will be small. I will have to buy the filet mignon at Costco to cook at home instead of eating out with that gain.
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